Frequent flyer program basics

Frequent flyer programs have been around since the 1980s, and show no signs of going away. If you know just a few basic facts about frequent flyer programs, you will be in a much better position to benefit from what the programs have to offer. These basics realities are common to almost every program, and if you take a little time to review the basics, you can avoid the surprises that can ruin your relationship with your airline.

What is a frequent flyer program?
In short, these are programs run by the airlines that reward members with benefits such as free airline flights. In order to gain these benefits, members have to purchase goods or services, including airline flights, and in return they receive credits that can be applied to a variety of awards. In most programs, these credits are earned in one of several ways:

• By purchasing a ticket and flying on a participating airline, where the number of credits are usually, but not always, based on either on the number of miles flown or the number of flight segments flown.
• By spending money on specific goods or services, where the number of credits is determined by the activity performed or by the number of dollars spent.
• As a bonus for taking particular actions. Typical bonuses include credits granted to new program members, to members purchasing premium services like business or first class tickets, or as part of some other promotion by the airline or by an airline partner.
• Through a combination of one or more of the above methods.

Who has frequent flyer programs?
Most major airlines either have some kind of program in place. Partner companies may also be associated with a particular airline's program in that purchasing goods or services with that company will give you credits in a frequent flyer program. Depending on the program, the partner could be another airline, car rental companies, hotel chains, or credit card companies.

What kinds of rewards can I get?
While frequent flyer programs can offer all kinds of goods and services for loyal customers, the two basic benefits are free flights and flight upgrades. While the sophisticated frequent flyer program member can get creative and get rewards such as free hotel stays, rental cars, and a variety of other goods and services, most users are in it for the free flights or the free upgrades.

How do I join?
Joining is as easy as asking the airline. You can do it when you check in for your next flight, when you make your reservation, or by contacting the airline's frequent flyer program.

How much does it cost to join?
Airlines typically don't charge to join the program. Companies with programs that are affiliated with frequent flyer programs may charge a fee. For example, a credit card company may offer a credit card that generates credits for a frequent flyer program whenever you make a purchase, but that credit card may have a fee associated with it even though the individual frequent flyer programs may not charge a fee.

How do I keep track of my credits?
The typical frequent flying program keeps track of your activities and add or subtracts credits as you earn credits, redeem credits, or as your credits expire. Usually, your information is available either through an online account or provided to you in some kind of monthly or quarterly statement.

What kinds of rules and restrictions do I have to deal with?
The rules for each frequent flyer program vary. Typical rules and restrictions include the following:

• Credits that are not used may expire.
• You may not be able to exchange your credit for the reward that you want. For example, free flights or upgrades may not be available for the day or time that you want.
• You may face taxes or other charges when you redeem credits for rewards.
• You are responsible for making sure that your purchases or other activities are properly credited by the frequent flyer program.
• You can redeem your credits for rewards and give those awards to another person, usually with little or no cost.
• You may not be able to transfer your credits to another person, and when it is allowed it is usually neither easy or free.
• Taxes, security fees, or other fees may be associated with your reward.
• Extra charges for reservations made close to the time of the flight.

Which program is best for me
Which program is best for you depends on what kind of flyer you are. You should join a program associated with the airline you plan to use for most of your flights. This is so that you can more quickly get to the a level of credits that allow you to get rewards such as free flights. Where you go from there depends of what kind of flyer you are. If one of the profiles below describes you flying or buying behavior, then you may consider following the advice given for what program to use.

• The casual flyer: If you fly at most only a few of times a year, and your goal is to get the occasional free ticket or upgrade, then it is best to keep things simple and pick a single program to use and try to do most or all of your flying with that one airline.

• The frequent traveler: If you fly with a particular airline frequently enough to get one or more free airline trips per year, then you typically have two choices for what to do with your miles or credits: focus on redeeming your miles or credits for rewards such as free airline tickets or free hotel stays, or focus on building up our miles and credits so that you can get into higher levels of the frequent flyer program. Typically, at these higher or elite levels, you receive one or more benefits, such as expedited check in, early seating on flights, and bonus miles or credits in addition to what you normally get.
  
  Like the casual flyer, you should try to pick one program where you will do most or all of your flying.

• The very frequent traveler: If you fly so often that you have no problem being in the elite levels or two or more programs, then you are probably traveling so much that having more trips is not a benefit or a reward. If this sounds like you, then you would probably want to focus more on making your trips more comfortable by using your credits and miles to upgrade to business or first class whenever possible, and to do other things to make your trip more pleasant.
  
  At this level of activity, you could probably look at having two or more programs where you can build up enough credits or miles to receive signficant benefits. It would probably make the most sense to choose a second or third program with an airline that flies to destinations that your primary airline doesn't fly to as much or doesn't fly to at all.
  
  If you happen to have so many miles and credits that you can't redeem them all, and you have run out of friends and family who want or need the rewards, then you should consider doing other things with your miles and credits. One option is to either transfer your miles or credits to an account controlled by a non-profit organization, or to redeem your miles or credits for free airline tickets for this organization. Doing this may cost you, but if you are doing this on behalf of a recognized tax-exempt charity, then you may want to consult with your financial advisor to see if the expense would be considered a tax-deductible donation.

• The big spender: If you spend several thousand dollars each month, then you have options that allow you to build up significant amounts of frequent flyer miles without ever leaving the ground. An excellent option for the big spender is to use a credit card that is associated with some kind of frequent flyer program and to channel as many purchases as you can through that credit card. A credit card program may either be associated with a single airline, or it may be set up so that you have two or more airline choices when it comes to redeeming your miles or credits. You have to look closely at the rules of these kinds of credit card programs, especially those that are not associated with a particular airline, to see if you will be able to easily redeem your miles or credits for a reward of your choice.
  
  If your card is not directly associated with an airline, you will have to keep track of the miles, credits, and rewards in that credit card program, as well as the miles, credits, and rewards in your airline's program. One advantage of this kind of card is that any purchase of an airline ticket gives you an automatic bonus. The airline counts the miles or credits from the ticket, and your credit card company counts the miles or credits on the card.
  
  In most programs, there is a relationship between the amount of money spent and the number of miles or credits that you gain for each unit of money that your spend. In the US, it is usually one mile for each dollar spent.